Which of the Following Is the Best Reason for Management

question 106

Multiple Choice

Which of the following is the best reason for management to emphasize fraud prevention and deterrence?

• A) It is often more effective and economical for companies to focus on fraud prevention and deterrence rather than on fraud detection.
• B) Collusion is impossible to detect.
• C) The AICPA requires management to implement a fraud prevention program.
• D) All of the above are equally valid reasons.

Distinguish between types of statistical data (e.g., continuous vs. categorical, sample vs. population data).

Interpret cumulative relative frequencies and understand their significance.

Understand the fundamentals of loans and interest rates, including calculating loan payments and total amounts borrowed.

Calculate the future value of investments or savings, including those with regular contributions over time.

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Definitions:

Direct Labor Hours

Direct Labor Hours refer to the amount of time spent by workers directly involved in the production of goods or services, used as a basis for allocating labor costs to products.

Factory Overhead Costs

Expenses related to the day-to-day operations of a factory that are not directly tied to a specific product, such as utilities, depreciation, and maintenance.

Period Costs

Expenses that are recognized in the income statement when incurred, instead of being tied to inventory, include utilities and rent for office space.

Selling Expenses

Costs incurred directly and indirectly in selling products or services, including advertising, sales staff salaries, and commission.